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Loop Industries Announces MOU For US$66 Million of Non-Dilutive Financing from Reed Management, as Part of a Joint Venture for European Infinite Loop(TM) Technology Roll-Out
US$33 MILLION INITIAL INVESTMENT FROM REED MANAGEMENT ("REED") TO BE PROVIDED TO LOOP INDUSTRIES AS NON-DILUTIVE CAPITAL TO FUND LOOP'S TECHNOLOGY
About this update from Loop Industries, Inc.
[{"type":"text","content":"US$33 MILLION INITIAL INVESTMENT FROM REED MANAGEMENT (\"REED\") TO BE PROVIDED TO LOOP INDUSTRIES AS NON-DILUTIVE CAPITAL TO FUND LOOP'S TECHNOLOGY COMMERCIALIZATION GLOBALLYREMAINING US$33 MILLION TO BE INVESTED IN A STRATEGIC JOINT VENTURE FOR COMMERCIAL ROLL-OUT OF INFINITE LOOPTM TECHNOLOGY IN EUROPEMONTREAL, QC / ACCESSWIRE / JANUARY 16, 2024 / Loop Industries, Inc. (Nasdaq:LOOP) (the \"Company\" or \"Loop\"), a clean technology company whose mission is to accelerate a circular plastics economy by manufacturing 100% recycled polyethylene terephthalate (\"PET\") plastic and polyester fiber, announced today that the Company signed a non-binding Memorandum of Understanding (\"MOU\") with Reed, a European investment firm focused on high impact and technology-enabled infrastructure.Loop and Reed intend to form a strategic long-term partnership through the establishment of a 50/50 joint venture (the \"JV\") to commercialize Loop's technology in Europe. Reed intends to provide financing of €60 million (US$66 million) in non-dilutive capital. Of this amount, US$33 million is to be provided to Loop as non-dilutive capital to fund Loop's technology commercialization globally. The remaining US$33 million is to be invested in the JV.The non-binding MOU is subject to customary due diligence and the fulfillment of certain pre-closing conditions. The transaction is expected to close by the end of March 2024.Under the terms of the MOU, Reed will provide capital as follows:US$11 million equity investment in the JV to acquire from Loop exclusive rights to co-invest alongside Loop in commercialization projects using Loop's technology in Europe through the planned joint venture between Loop and Reed;US$22 million loan from the JV to Loop in two equal tranches - first tranche paid at closing and second tranche paid in the following 12 months with both tranches having a 10% PIK rate and 3-year term;US$33 million commitment to cover initial costs to develop projects in Europe, including Loop's equity contribution to the previously announced JV to construct an Infinite LoopTM plant in Saint-Avold, France;Any subsequent capital injections in the JV will be funded on a 50/50 basis between Reed and Loop.The planned 50/50 JV will be formed to invest in projects across Europe to commercialize Loop's technology. This partnership reflects the strong com...